Tabcorp anti-money laundering program was 'insufficient', judge says

Photo of Paula Dwyer, Leighton director at the AGM on in Sydney on the 20th of May 2013 Photo Dom Lorrimer
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Management at wagering giant Tabcorp "should have done more" to meet the company's obligations to combat money laundering and terrorism financing, a federal judge has found.

Earlier this year, the ASX-listed Tabcorp agreed to a massive $45 million fine to settle a case launched by the financial intelligence agency over extensive breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act between 2010 and 2014.

Federal Court judge Nye Perram on Friday released his reasons for approving the penalty in a settlement between Tabcorp and Austrac, which he said averted a "very large trial at considerable public expense".

He noted that the breaches were not deliberate. "The contraventions did not arise as a result of a deliberate intention to contravene the act," Justice Perram said.

"Instead, the state of affairs which prevailed ... came about because of insufficient resourcing together with insufficient processes for consistent management oversight, assurance and operational execution."

Austrac launched the civil suit against Tabcorp in 2015 after concerns it had not properly monitored the behaviour of its customers as required under the law.

The judgment said that Tabcorp's board and senior management were not aware of or involved in the breaches, but "management should have done more".

Tabcorp said it had significantly strengthened its risk and regulatory compliance capabilities, including better monitoring of customer transactions.

"In the past 18 months, we have appointed a chief risk officer and significantly upweighted the capability of our risk and compliance function," Tabcorp chair Paula Dwyer said.

"We have taken valuable learnings from our experiences over the past few years and we are committed to continuing to invest to ensure our systems and capabilities remain contemporary in an evolving regulatory landscape."